March 5, 2025 • 40 mins
Dive into the evolving landscape of the home inspection market as we uncover the latest insights and predictions for Q2. In this episode, we analyze the surprising shift toward a buyer's market, particularly in regions like Southeast Florida. As inventory levels rise, home buyers are exhibiting more caution, prompting a shift in how inspections are conducted.
Join us as we break down the implications of these market changes for home inspectors and discuss strategies to meet new demands. With predictions for the upcoming spring season, we equip listeners with the necessary knowledge to navigate this dynamic market effectively. Tune in to stay ahead of the curve and learn how to elevate your home inspection business amidst these evolving trends. Don't forget to subscribe and share your thoughts with us!
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*The views and opinions expressed in this podcast, and the guests on it, do not necessarily reflect the views and opinions of Inspector Toolbelt and its associates.
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Episode Transcript
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Speaker 1 (00:00):
This is Inspector Toolbelt Talk.
Speaker 2 (00:10):
Hey, bian, welcome back to the podcast.
Hey, thank you, Bian.
You know I feel bad because youknow, for those that can't see,
obviously most of our listenersare audio, only they can't see
your beautiful InspectorToolbelt shirt.
Speaker 1 (00:22):
Yes man, I'm official .
Speaker 2 (00:24):
And I show up without one.
Speaker 1 (00:26):
Yeah, like a doof On the plus side.
At least you do have a shirt on, so that is good yeah.
Speaker 2 (00:31):
You know we try to keep all our clothes on during
the show.
Great to have you back on.
It's our Q1 Market Outlookpodcast.
So that's something that youand I usually do together here,
and you know I like the Q2market outlook.
It's the, you know, just beforespring hits in most markets.
You know our southern markets.
(00:51):
It's a transition to adifferent kind of market or
northern parts.
You know of the US and Canada.
You know it's a spring marketwhen everything really gets
going.
So it's kind of a fun and wildprediction of what the next
three months are going to bring.
Would you agree with that?
Speaker 1 (01:06):
I would indeed, yes, but before we get started with
that, I haven't been on sincethe convention.
Have we talked about that atall on the podcast?
Speaker 2 (01:13):
No, and I actually have a note here to talk about
that a little bit we did.
We went to the InternationalConvention in Orlando.
That was fun.
Speaker 1 (01:20):
Yeah, that was unreal .
It's the first convention I'vebeen to and, uh, that we've
actually inspector tool belt hashad representation, had a booth
be part of the whole experience.
Um, but you know, the craziestpart, the craziest part to me is
how many people walked up andwanted to take their picture
with you because of inspectortool about talk.
(01:41):
Everyone's like, oh, let mehear it, let me hear it.
And you're like what?
And you're like what, you'relike welcome to Inspector
Toolbot.
And they're like, yeah, that'sit.
Speaker 2 (01:51):
That was so weird.
I mean, we get thousands ofdownloads, just ridiculous
amounts of downloads and listens, and the metrics are all over
and we're very proud of that.
But when you experience it inperson, it's so weird.
Because my wife is like reallypeople wanted a picture with you
.
I'm like, thanks, honey.
But it was super weird, likeand like the, the stuff that
(02:16):
people know about me, because Ijust talk, you know, and people
are like bringing up likepersonal things that I've never
met before.
They're like, hey, wouldn't yourather have a scotch?
And and I'm like actually, yeah, kind of, how do you know that?
Speaker 1 (02:29):
Yeah, no, it was, it was great.
So, yeah, it got took a littlegetting used to because I mean
we've only been obviouslyvirtual and online, you know,
since we started this, and to bein person and to to have a live
fan base, it was a bit surreal,but once we kind of got used to
it, it was just what a coolendorsement from the inspection
community.
I mean.
(02:49):
There was really only a smallpercentage of people who didn't
hear about the podcast orhaven't listened to it at some
other point.
So that was great.
Speaker 2 (02:59):
Yeah, there was over a thousand inspectors.
The vast majority of them wereat our booth, to the point where
I was pretty proud of it.
At one point we congested thearea, like I'm like this is okay
, I can deal with that, but wetalked to so many hundreds of
inspectors and it was just ablast.
And our user base.
They came up and they were alltaking pictures and we got to
(03:21):
meet them in person.
I took pictures of them.
We put them all over theinternet and just like, look at
everybody.
It was just, you know, it's fun, it was like it was just a good
time.
Yeah, you know looking forwardto the next one.
Speaker 1 (03:31):
Absolutely, absolutely.
So, to everyone listening, ifyou stopped by, thank you, and
if you weren't there, make plansto be at the next convention.
It's a cool vibe and we'd loveto meet you all.
But, yeah, committed to our fanbase more than ever.
Let's put it that way.
Speaker 2 (03:47):
And if you wanted an autograph and be on charge for
them.
You know I did not endorse that, it was his own idea.
I'm just kidding.
Yeah, yeah, no, but hey, listen.
So now that we talked about theconvention, which was super cool
, and there's another one comingup later this year which you
should look that up Internashiand Tapria are kind of putting
(04:10):
that one on, but the next threemonths things changed in a way
that I did not completely seeover the last quarter, like we
were pretty on, but there aresome elements in there that I
didn't expect and theregionality of things is gotten
really even deeper.
So I was looking throughCoreLogic, actually, and looking
(04:32):
through some data.
Interestingly enough, southeastFlorida is we're just going to
use Florida as an example for amoment Southeast Florida and
Florida as a whole has become abuyer's market.
What?
Yeah, I know, and it is verymuch regional, and so here let
me grab some data here, but Ididn't expect it to be that
(04:54):
regional.
You know what I mean.
First of all, according to someof the data well, actually all
the data, and CoreLogic was theone that I was kind of going off
of for most of this Last yearwas one of the lowest home sales
in three decades.
A matter of fact, home salesfell to the lowest level at one
point last year in three decades.
(05:16):
So within three decades wasalso the Great Recession.
So less homes at one point lastyear were sold in the entire US
than the Great Recession itself.
That's pretty intense and a lotof guys will call and say Ian,
what do I do?
Business is rough, this andthat, and unfortunately a lot of
it comes down to hold on, andhere's why hold on is important,
(05:39):
because this ultimately leadsto a buyer's market.
So there's been a surge inFlorida home sales, but mostly
because Florida is starting toturn to a buyer's market.
So let's see Florida endedJanuary of this year with
172,209 homes for sale, thehighest level since Redfin,
(06:04):
who's giving this data, beganrecording the data in 2012.
So whenever you have inventory,that's when it becomes a
buyer's market.
Sellers have to start competingfor buyers again.
Now that's Florida as a whole,southeast Florida in particular
(06:25):
had I forget the exactpercentage.
It was a little less than 10%of the homes taken off the
market.
Now you figure that'd be bad,but what happens is they use
that as an indicator of it beinga buyer's market.
So if a house is on a marketfor four or more months and then
it gets taken off of the market, they say, hey, that seller
(06:46):
couldn't get what they wantedfor it, so they took it off to
wait.
And that's an indicator thatit's also a buyer's market,
because otherwise, if you hadfive people competing for that
one house, escalator clauses thewhole nine yards, then it would
be a seller's market.
So Florida right now is a fullblown buyer's market overall.
(07:07):
But it's mostly being carriedby Southeast Florida.
So Northern Florida, westernside not as much, but overall,
if you took it as a whole, fullblown I say full blown it's on
the upward curve of what abuyer's market would be.
So it's got a couple more yearsbefore it peaks out.
That's beautiful, wow.
So it's got a couple more yearsbefore it peaks out, that's
beautiful.
Speaker 1 (07:26):
Wow.
So that's quite something.
And you made me like startthinking a little bit, because
just this last week my wife andI were commenting how in our
neighborhood because, if anybodydoesn't know yet, we live in
Florida, just north of DaytonaBeach, so we're in Northeast
Florida but what we commented onwas that there are more houses
for sale even in our immediateneighborhood than what there has
(07:47):
been since we have moved here.
There's quite a number of houseswith the signs up but they're
not moving.
I mean, those signs have beenup for a while and that makes me
think okay, so, like you say,maybe we're entering into a
buyer's market from the sense ofthere being more inventory, but
it seems like the prices Idon't know, this is just, I have
(08:09):
no data to back this up, but atleast I look at the prices
they're asking for those homesin this immediate neighborhood
it seems like the prices arestill a blocker.
It's like the value hasescalated over the last few
years and I don't know, justthey're not moving.
Some of them have been on themarket for a few months with no
movement.
But I was just trying to putthat in correlation with what
(08:29):
you were just saying.
Speaker 2 (08:30):
Yeah, no, and so that's exactly what happens.
So then, when more houses areon the market, eventually when
you have too much of something.
It was Thomas Sowell.
He was a famous economist andhe talked about how, basically,
scarcity is the principle of alleconomy.
The more you have of something,the less valuable it is.
(08:50):
The less you have of something,the more valuable it is.
Everybody says that, everybodyunderstands that Right.
So the more houses that are outthere, they can't sustain those
prices.
So if somebody puts a house onthe market for $400,000, it sits
there for four months and getstaken off, the next person is
going to say, well, they didn'tget it, let me put it on for
$380,000.
Now, if it goes in three and ahalf months and it sells for
(09:14):
$360,000, now the next person isgoing to say, well, I'm going
to put it on for $360,000 andstart there.
That's the way we lower thecost of the housing stock, which
is very important, becauseprice and a combination of price
and interest rates is reallywhat's keeping people from
buying homes.
But it doesn't matter.
(09:34):
You could have housespractically free.
If there aren't houses for sale, it doesn't matter.
We, as home inspectors, want tosee more houses for sale.
We don't care how much theysell for ultimately, until we're
buying a house ourselves, whatwe want is more houses for sale,
and at 172,000 houses inFlorida, that's the most number
(09:56):
of houses that Florida in a longtime has had for us to inspect,
and that's a good thing.
And we have to think of it as acascading effect too.
So if there's eight houses in aneighborhood like yours that
are for sale, some of them gettaken off the market because
they sit too long.
Some go for a lower price, somesit there for six months to a
(10:17):
year because they have to sellthem.
Now, all of a sudden, sixmonths later, you have 14 houses
for sale and then you have 18houses for sale.
Now you have 20 and the stockwill build.
But then the more we go into aseller's market, not only do we
get those inspections butcumulatively we get more home
inspections per inspector in acouple of different ways.
(10:40):
So a buyer in a buyer's marketis going to be more cautious.
Different ways.
So a buyer in a buyer's marketis going to be more cautious.
So a buyer is more likely towalk away from a home that they
don't like the inspection for.
So if I find roof damage andit's a $30,000 roof and they're
like well, there's 20 houses forsale, I'll just go to the next
one that doesn't have a roofingproblem.
Now we get a second inspectionand, ethically speaking,
(11:04):
hopefully home inspectors areout there failing things hoping
to get a second inspection and,ethically speaking, hopefully
home inspectors are out therefailing things hoping to get a
second inspection.
I hate that.
Just say what it is, let thebuyer decide.
But statistically, let's say,one out of five buyers ends up
walking away from the house andhiring us again.
Cool, so then, on top of that,sellers are more likely to get a
(11:24):
pre-listing inspection becausethey're like, listen, I don't
want to be one of my neighborswhere the house sat here for
eight months and didn't sell andthe two failed inspections.
Let's just get a pre-listinginspection and we'll get it
taken care of.
Let's say one out of five forthat.
So now, instead of fiveinspections, we have seven.
We increased what's that?
20% increase.
Speaker 1 (11:48):
No, that's a 40 increase.
So so more inspections than abuyer's market, than way more
market.
Speaker 2 (11:51):
Okay, all right.
Yep, by my anecdotalcalculations from my own
experience I don't have raw dataon that because most states
aren't reporting for homeinspections that is, it's about
a 40 increase, two for everyfive.
No, that that's pretty logical.
Yeah, I would like to see themarket more like that yeah.
Speaker 1 (12:10):
So then interesting, because then technically we
should, as inventory rises, weshould see price points ease
somewhat.
Um, and, and the crazy part is,is that most of the like you,
zillow and Realtorcom andwhoever else is out there,
redfin yeah, they're all for theyear I don't know which part of
(12:31):
the year, but for the yearthey're still predicting they're
pretty bullish on house value,still increasing from the
previous year.
I don't know if that I meanmaybe like different local
markets will obviously like playout at a different rate or in a
different way, but I wonder, Iwonder how they're coming on
that, or if maybe the currentmove was unanticipated.
Speaker 2 (12:54):
Yeah, so, and I actually agree with them.
I personally I do read a lot ofrealtorcom's data and
zillowcom's data data andzillowcom's data.
Um, I find redfin for somereason seems to have some more
of the more accurate data thatI've seen.
Okay, uh, so I tend to lean ontheirs a little bit more at
times.
But, uh, florida, texas andlouisiana right now florida is
(13:20):
mostly into a buyer's market.
Louisiana and Texas are gettingthere.
Texas new constructioninspections are really, really
bolstering what is there for theinfrastructure for the home
inspection industry and kind ofalways has in a lot of ways.
But those three states areheading into a buyer's market.
Problem is here's anotherexample the Northeast and I'm
(13:45):
not just talking like New Yorkand Massachusetts, I'm talking
like Pennsylvania to the tip ofMaine and everything in between
is very much not doing well forhome inspectors, okay, or for
buyers in general.
Still very much deep in aseller's market Inventory's low
and the same CoreLogic datatalks's market.
(14:05):
Inventory's low and the sameCoreLogic data talks about that
Inventory's low.
House pricing is going way upstill multiple offer situations,
the whole nine yards.
It's still not as bad as it wasa few years ago with all the
skipping of the inspections andthings like that.
There's less of that now, butplaces like the entire Northeast
(14:26):
are why they say house pricesare going to continue to rise.
So you think about Florida.
Florida, let's say, an averagehouse is $400,000.
I don't know, I don't livethere, but now they're still
going to hang out at that pricewhile we enter the buyer's
market.
So it may go down 390.
It may go up and down andfluctuate a little bit, but it's
(14:48):
going to hang right around$400,000.
So there's not going to be adownward sweep in pricing.
That's going to be measurablenationally, whereas places like
the Northeast it may go upanother 3% this year, gotcha.
So that's what sets off thenumbers nationally.
Speaker 1 (15:03):
Yeah, so it becomes a wash and ultimately a gain at
the end of the year.
You didn't mention interestrates.
You know that's always a hardone to try and like predict or
something.
But I did read an interestingarticle this week that was
referring to data that Targetjust released and that it's sort
of like warning sign theeconomy is slowing down,
spending is down.
(15:24):
It's sort of like warning signthe economy is slowing down,
spending is down.
So that is the first time in awhile that we've heard that from
one of the big retailers.
So I mean, potentially that's agood sign for interest rates
easing as well in the nearfuture here.
Speaker 2 (15:37):
The other thing with interest rates is I've said this
all along we can drop theinterest rates to 2%.
The average homebuyer.
It's not going to help themmuch.
If they have $350,000, they canspend, but all the houses are
$450,000.
Right, so interest rate is afactor.
When interest rate's lower,basically the upper 20% of
(16:01):
people in the US are the onesthat make money.
I mean, there's guys out therethat'll just borrow stupid
amounts of money at 2% and 3%,like there were before, you know
, in the twos rather and they'llgo and they'll make 9% on it
and pay back the loan over thecourse of time and then, with
inflation, they're paying back aloan with money that's worth
(16:22):
less, while they're still making9% interest on it.
It's like the average person.
We don't do that.
That's not what the averageperson does.
That's what business savvy andwealthy people do and all that
stuff.
So it's not going to help ourindustry if interest rates just
go down.
Ideally for me, I would like tosee house prices go down first
(16:43):
throughout this year, and thisis going to be an unpopular
opinion because everybody talksabout interest rates.
But you know what?
It's an easy thing to say likeoh, there's a crack in the
foundation.
The foundation must be bad.
It's like well, it's a crack.
Let's talk about all thedifferent other factors.
Interest rates is just one smallaspect.
I'd like to ideally see housessit on the market for a while
(17:07):
and prices go down first.
Then, as prices get closer toaffordable not completely
affordable, let's say, $420,000house is now 390,000.
Then over the course of theyear, and then interest rates
drop.
That's ideally what I wouldlike to see, because now we'll
have inventory and lowerinterest rates.
Because if you just lowerinterest rates right now, you're
(17:29):
going to have another buyingfrenzy of the upper 20% of
people buy all these houses,some will skip inspections and
then we'll just lie flat on ourfaces again.
I'd like to see them pairedtogether, but I'd like to see
interest rates come down lowerlater on.
Do you think interest rates aregoing to come down though?
Yeah, they're right around 7%or so.
Speaker 1 (17:48):
I mean you make a good point because you know
interest rates have obviouslybeen heading up.
They came down a little, thenup again.
So I think there's apsychological factor to like
knowing which direction themarket is moving in and we're
like, oh wow, it looks likewe're going to get some relief.
But what does that relief looklike and what does it translate
to the average buyer's actualmoney that they're going to be
(18:10):
spending each month?
You know.
So, okay, we're sitting above7%.
If we come down below, you know,even to 6%, what does that
actually mean to someone who'sgot a loan for, you know, 300
and some thousand dollars?
You know, I mean I haven't donethe math on it, but to your
point, you need the actualticket price to drop to for it
(18:33):
to actually move the needle.
Dropping down like a few pointsin the percentage point is not
going to probably push them.
So a combination of those twofactors I think I like the way
you mapped it out is the mostlikely path to accelerating the
number of transactions we'regoing to see in the market.
Speaker 2 (18:50):
Yeah, and then there's other factors, like at
the beginning of the year wetalked about how new
construction was, for the firsttime, starting to almost keep up
with demand.
So we were counting on newconstruction to carry out the
year, to help build up the backend of inventory while it
(19:12):
transitioned, in some markets atleast, to a buyer's market, I
mean.
But now, with tariffs and otherthings going on, there's some
uncertainty as to whether or notbuilders can still build houses
relatively affordably andwhether or not some of these big
builders might have troubleslater on for houses that they
(19:33):
spec'd out at a certain pricewithout any kind of escalator in
their contracts with theirbuyers as to what materials are
going to cost.
They could have some issues.
So there's still some questionmarks as to that.
But right now home building hasslowed slightly because of that
and you can't blame it.
You can't blame big builders.
(19:53):
If you're a big builder workingin three States and you're
building hundreds of homes andyou're like man, an extra dollar
per two by four that could.
That could cause us to makelayoffs because we're doing 300
houses.
You know there's a big, there'sa big deal there.
So we'll see where that onelands, but right now that's
slowed down a little bit andthat's going to hurt more places
(20:16):
like Texas and stuff, becausethere's a lot of states in the
Northeast and Northwest.
It's more of a tradition inmost contracts, but most of them
don't get phase inspections.
They just kind of move in andcount on the town inspector to
do a good job, which they neverdo, you know, yeah, so we'll see
where some of those things land.
I think building is still goingto continue to happen, just at
(20:38):
a slower rate, because of theperception of things.
Speaker 1 (20:41):
Yeah, yeah, it will be interesting to see what
actual you know how prices areaffected, for example, on lumber
imports and stuff, Because someof the larger contractors
obviously have massivewarehouses filled with product
and materials that they'vepurchased and negotiated rates
or whatever.
(21:02):
But if you know that the nextbatch is going to cost X amount
higher, you're not going to beselling even your current
inventory at the premium ratethat you were able to buy it for
.
You're going to try and hedgefor that.
So that's why prices usuallyhave almost an immediate effect
on the end consumer, whetheryou're a home buyer getting
(21:22):
those materials through yourbuilder, or if you're going to
Home Depot or Lowe's or anyother lumber yard to get lumber.
So it will be interesting Ihaven't really paid much
attention to those prices inrecent weeks to see how they are
responding, but I'm thinking inthe next few months we'll have
a better idea as to whetherthere is going to be any effect,
(21:44):
how long these tariffs aregoing to be in place, whether
there's alternative supply thatcan be tapped in other parts of
the world for similar pricing.
We just don't know.
We'll have to wait and see howit all trickles down.
Speaker 2 (21:57):
Yeah, and we're going to know by the end of the year,
because you talk about thosewarehouses of stock that they've
built up.
So the federal government, theytax your inventory and it was
actually based on lumber.
It's one of the reasons why wehave that tax, so they can't
store that lumber and then carryit over to the next year.
So by the end of this year orwhenever their fiscal year ends,
(22:20):
these construction companiesare going to need to do
something with it.
So they could be waiting.
And then we see a big boomlater on in the year because
they're like we've got to use upthis lumber or we're paying tax
on it, or they may say, listen,the taxes may be less of a hit
than the increase in price andthey may bite the bullet and
(22:41):
carry it over into next year.
That we're going to have towait to see.
But right now building hasslowed slightly, not incredibly,
but slightly.
I would encourage homeinspectors outside of states
like Texas, where there isbuilding going on, to try to
educate your market on phaseinspections.
(23:02):
That is a great market and 11thmonth inspections those have
been doing well.
But there's nothing like athree-phase inspection.
You have the phase one, phasetwo and the final that will keep
you busy and keep you scheduledout.
Uh, find these developments andfinding the people is hard.
(23:23):
The builders don't want youthere, but a lot of builders
still have that in theircontracts.
Sometimes it's mandated,sometimes it's not to be able to
get phase inspections.
But buyers of new homes in myarea I almost never do you hear
of a phase inspection.
Everybody says the same thingit's a new home, how bad can it
(23:43):
be?
Then you go to places like Imentioned, texas again.
It's like everybody gets aphase inspection.
It's like, wait, you didn't geta phase inspection.
Try to push those a little bit.
I think that's going to be animportant part of staying afloat
and not just staying afloat butowning some market share by
creating that market, gettingout there and saying, okay, how
(24:04):
do I get people to get a phaseinspection and then get them to
hire me to do it?
Speaker 1 (24:07):
Yeah, yeah, so I guess question then, as far as
like marketing and gettingyourself out in front of people
for something like phaseinspections, what are your best
channels to use to try to accessthat target audience?
Speaker 2 (24:21):
Yeah, that's the trouble is how do you target
them?
You're going to get them a lotthrough mortgage lenders and in
states where it's an attorneystate, which means a state where
they use attorneys for closings, talking to them because they
make out the best by protectingtheir clients' interest.
Mortgage companies are tryingto protect their own interest.
(24:41):
So if you can get in front ofthose two parties and you pitch
them two different ways,mortgage people are like hey, do
you want to protect yourinterest?
Do your clients get a phaseinspection?
Because you don't want to havea mortgage on a home that three
years from now they go to selland they sell it you know short
sale.
You know for 80 grand underwhat they paid for it.
You know now you guys are stuck, that doesn't look good.
(25:03):
You're like oh yeah, okay,let's talk about that.
For attorneys it's like hey,you want to protect your clients
from litigation and all thisother stuff?
Consider phase inspections.
Speaker 1 (25:14):
It's a hard sell in certain areas, but getting to
the people is the hardest part,yeah, because I'm even thinking
of the timing that you engagewith an attorney and somebody
doing your mortgage.
It's typically, for most, itwould be at the point where,
like phase inspections arealmost like already you're
looking to close, you know, andget financing and all that kind
of thing.
So even then it's not a donedeal.
Speaker 2 (25:36):
But new construction will still have mortgages on it.
Most homes have a mortgage onit, that's true.
So, unless somebody's buildinga house for 800 grand cash which
people do but for the most partthey're going to have a
mortgage on it, and some lendersrequire a phase inspection, but
I've also seen a lot of lendersthat don't enforce it.
(25:57):
They'll just say, like, did youget inspected?
And like, yeah, sure, and thenthey move on.
There is some open educationthat you can try and I've talked
about this on a previouspodcast like home shows.
You go to those home shows andthere's builders everywhere.
So, listen, you can't be abuilder's friend.
(26:17):
You just have to use, be usedto getting spat on,
metaphorically speaking, bythese builders.
You go to a home show and youset up a booth um, get a phase
inspection, protect yourselffrom the builders.
You're gonna get some dirtylooks, but you're also gonna get
some attention.
You know, um, hang up somepictures of things that you
found on new construction.
(26:38):
You know, discreetly, withoutmentioning any of the builders
in the room, their name.
Yeah, you know, don't, don'tmake enemies, but be like hey,
this is from a new constructioninspection.
Um, you know, if you have otherinspectors that you know in
other areas that have somepictures that they would like to
provide, and you can do abackdrop.
And you know, go to canvacom,c-a-n-v-acom, and you can get
(27:02):
some marketing material theremade and just say, is this
something that you want?
Do you want to have a floodedbasement because they crushed
the you know, the drain linegoing out into the yard when
they were backfilling?
You know, yeah, no, well, here,think about getting a phase
inspection.
Work that into your contract,yeah, yeah.
Speaker 1 (27:19):
I mean you definitely would stand out, even from an
attendee point of view.
Speaker 2 (27:24):
It would be so uncomfortable.
Speaker 1 (27:26):
Here's something different.
You can hire your own securityand have like two bouncer
looking guys at your booth Makesure you stay safe.
But yeah, that's an interestingapproach.
I mean, I guess it's justtrying to get yourself in front
of the would-be buyers to say,hey, like you say, education
campaign, obviously online isanother thing you can try, but
that's really hard Unless youknow what you're doing.
(27:48):
You're just going to bethrowing money down the drain,
pretty much.
Speaker 2 (27:51):
So a couple of things you can also try with new
construction agents in areaswhere they don't do phase
inspections.
They get a little bit wonkyabout it.
They don't like you to try toeducate because it slows down
the whole process.
But online people aren'tsearching for it.
That's why I say an educationcampaign.
If somebody needs to takestatins for their, what's that
(28:15):
for for your cholesterol?
Cholesterol Good, so obviouslya high cholesterol.
Now we all know.
So if you take, if you need totake, statins for your high
cholesterol, but you don't knowyou have high cholesterol,
you're not looking up statins,right?
So you need to know that youcould have a potential issue
before you look for the cure,right, so you need to have an
education campaign.
But the new construction agents, you can try that.
(28:38):
Or you can do a social mediacampaign and run some ads.
So you know, like AJ and them,they do a lot of and Preston
well, preston does mostly olderhomes that you know.
Aj is doing newer homes andhe's like hey, here's, here's
something I found on a newconstruction that's going to
draw more people to go.
Oh, I need a phase inspection.
Um, you can run some ads and avideo is always best for the ads
(29:01):
of you finding stuff on a newconstruction inspection and say,
okay, don't, don't get caught.
If you're buying a home, youknow, make sure.
X, y, z.
Speaker 1 (29:10):
Yep, yeah, social media marketing, I mean, and
lately most platforms are tryingto boost, like, local content.
You know they trying to beaware of, of local business and
trying to do that.
So, yeah, that's a great,that's a great idea.
Well, this is turned from alike a market outlook to a
marketing episode, but it makesit practical, doesn't it?
It's like okay, so this iswhat's happening, so how can you
(29:32):
fix it?
How can you get in front of itto get away from the whole.
Speaker 2 (29:35):
how to market new construction.
Internachi released data, andthe data pointed to the fact
that one in six inspectors arepart of a multi-inspector firm.
Now, wow, one in six.
I take that as five out of sixare independently owned.
(29:57):
Right, so that means themajority of our industry is
still solopreneurs, you know,working on our own which I like.
Speaker 1 (30:04):
Yeah Well, I mean even at the uh, at the
convention and maybe the natureof a convention attendee.
Um, if you're part of amulti-inspector firm, you're
less inclined to maybe want tonetwork and, you know, be be out
there.
Maybe a select few inspectorsfrom the multi-inspector go, but
most of the people we spoke towere, interestingly, were,
(30:25):
husband and wife teams.
There were so many of them Iwouldn't say most, but many of
them they were family businesses.
You know, where the family wasinvolved.
Sometimes even the kids were.
You know, I think even ofPreston how his family is like
engaged with the business andlearning and things like that.
So, yeah, I do want to lookmore at the five out of six than
the one out of six there,because the solo operators are
(30:51):
definitely still the majorityand the life and blood of the
industry.
Speaker 2 (30:54):
Yeah, but the multi-inspector firms are moving
in.
They are, you know, actually, alot of our guests most of our
guests are multi-inspector firms.
Our most popular podcastepisode, though, was about how
to be a successful soloinspector.
Popular podcast episode, though, was about how to be a
successful solo inspector.
So there's a good mix in ourindustry, but I just thought it
was interesting because that'sthe highest number that I think
we've probably ever been at.
Interesting.
I think it's also good becauseI think that's where the market
(31:18):
is shifting to over the nextdecade, and we're going to see
that number grow of those partof multi-inspector firms
consolidating markets.
That's what markets do.
They consolidate over time, butI do think that it's an
opportunity for us to marketourselves if we're a solopreneur
and say, hey, we're stillindependently owned and
multi-inspector firms.
They just have a lot of otheradvantages, like they can spread
(31:38):
themselves out farther, alarger territory, cover short
notice things for buyers andsellers and agents and all that
Right, but I just thought thatwas an interesting side point.
Speaker 1 (31:48):
It is interesting and there is a difference between
being a multi-inspector andbeing like a part of a larger
national franchise.
That's a whole other you knowstory.
So I mean you do get a guy whowas a solo entrepreneur, a solo
inspector, and he's growing andwanting to grow locally.
So you know he hires on acouple of inspectors and he's
growing and wanting to growlocally.
(32:09):
So you know he hires on acouple of inspectors and he
grows organically in that way.
So now he's multi-inspector,which is, I mean, great scale
path for any business.
Right, that's ultimately whateverybody's goal is.
Speaker 2 (32:19):
But yeah, Not necessarily everybody, that's
true.
Some people like to stay solo.
I got to say the happiest I wasinspecting was solo.
You know, just driving aroundfelt like Han Solo, just in my
little spaceship, doing coolthings, touring the galaxy,
doing your thing Touring thegalaxy.
But there are disadvantages,you know, like if you get sick,
(32:40):
you know your truck blows a tireon the highway or you know what
do you do?
You're kind of stuck.
So there's advantages anddisadvantages, but that's just a
market trend.
But here's my prediction, bian,and I don't know about yours.
I think the second quarter, q2,march, april and May I think
it's going to be a good spring.
I think we're going to hitright in the middle, nationally,
(33:03):
us and Canada I think we'regoing to hit right in the middle
.
I don't think it's going to bea nine out of 10 year, I think
it's going to be a five out of10, maybe a six out of 10.
I think new construction overthis next quarter is going to be
very important For markets thatdon't have a lot of new
construction inspections.
I do think that we should startpushing into that market a
(33:24):
little bit harder there andcreate some education and try to
get ourselves in there.
It's not going to be easy toget our foot in the door, but I
do think it's worth it.
I don't think interest ratesare going to go anywhere and I
don't think three months is longenough to see any drastic price
drop.
But for guys in Florida,louisiana and Texas,
congratulations.
You are the first ones to startpulling out of this nosedive
(33:48):
that we've seen for the pastcouple of years in our industry.
Home inspections are going tobe a little bit better, the only
problem that you guys will see.
Besides Louisiana, florida andTexas are two out of the three
top most saturated markets forhome inspectors.
So you're going to still seethat.
But fortunately for you, ifyou're still around, those that
(34:11):
have left have left some marketshare for you.
So I think they're going toride it out for a long time.
But us up in the Northernterritory and out West, we're
still working our way out of themud a little bit.
But these are good signs.
I mean over this year and intonext and 2026 and 2027, we're
only going to see upward trendsfor the most part, unless
(34:32):
something big and crazy happens.
Speaker 1 (34:33):
Yeah, now that sounds like a pretty good prediction
to me, and what you said towardsthe end there, I think, is key.
Like, regionally, there will bea difference in how this plays
out.
There will be a difference inhow this plays out.
So if you maybe followed thisepisode of the podcast to see
how especially Ian does hisanalysis to make these
determinations, use some ofthose inputs in your local
(34:55):
market.
Look at how many houses arethere for sale, what the price
trend is going Are we going up,are we going down?
What is your new constructionstats looking like?
And that'll help you regionallyto see how you can adjust
either up or down expectationsfor your local area.
Speaker 2 (35:12):
Yeah, and that's a great thing to do.
That Bian just mentioned thereis learn to do these things in
your own local market.
Number one look at price drops.
It is a house, bomk, which isback on market, and if it is,
did it come with a price drop?
How many houses were taken offthe market?
And you can set filters forthis on things like Zillow and
other areas and I'll just letyou know hey, this is off the
(35:34):
market or this is back on themarket.
Here's a price drop on thishouse.
I do it for my own local area.
Every time a house drops inprice, I get alerts all over the
place.
I'm just a freak that way.
I like to watch that, but keepan eye on those things.
Once that starts happening moreanecdotally, you can say okay,
cool, that's a good trend for usas a home inspection industry.
Look at the number of houses onthe market.
(35:56):
If there's 300 houses in a20-mile radius of you right now
and then later this year there's412?
Cool, wow, okay.
Then later this year there's412.
Cool, wow, okay.
That that?
That means that hypotheticallysoon, the prices of those houses
are going to start dropping andthat also means that in six
months, you'd probably have sixmonths.
After that, you'd probably havefour or 500 houses in the market
(36:18):
and now it's going to become abuyer's market and you're going
to start to see that 40%increase that I that I told you
about at the beginning of thepodcast.
Speaker 1 (36:26):
Yeah, so do you see a place here in the future where
we're going to see most marketstrend towards a buyer's market
over the next few years?
I mean I guess it's too far outto map, but I mean that's
ideally where we'd like to seethe trend continue, right?
Speaker 2 (36:42):
Cyclically speaking, yes, that is typically what
happens.
You almost never will see atrend where it goes seller's
market and then almost buyer'smarket and then back to seller's
market, unless something crazyhappens.
It's always sellers, buyers,sellers, buyers, up and down
very long run of a very highseller's market.
(37:05):
Usually you peak out in a yearand then you start to drop and
they I don't know the exactcycle number, so maybe I
shouldn't say that it peaks outfaster than than this felt like,
but the pandemic that justtotally changed the whole cycle
of things.
We tend to stay in a buyer'smarket.
Speaker 1 (37:26):
From my experience longer than we do in a seller's
market, and then we forget.
We forget the pain and thesuffering yep.
Speaker 2 (37:32):
So I think we'll be us and canada all together.
I'm hoping mid to 2026, all ofus for the most part.
At the very latest I wouldimagine 2027 middle of the year,
and I always say middle of theyear because you have to get
through the spring boom and thenyou kind of realize what's
going on.
Speaker 1 (37:52):
Okay, yeah well, that makes me kind of excited
because, uh, I know a lot ofguys have that.
Look, there's a lot of guysthat are doing really well, um,
but nobody's gonna.
You know, uh, he's under anyillusion of how the last few
years were.
There were tough years.
So, uh, to hear there's finallysome evidence, some actual hard
evidence of of things moving inthe other direction, um, even
(38:14):
for me not as a home expector itmakes me excited to to see
where the market's going to goand how, how it's going to
benefit everybody.
I'm looking forward to that.
Speaker 2 (38:21):
Yeah, and you know there's also the sentimentality
of people about things Peopleare starting to.
I was just reading an article Iwant to say nerd wallet, but I
don't think it was nerd walletabout how people are starting to
get used to the new price of ahome, get used to new interest
rates.
That takes time.
Once people get used to that,then they'll start to buy a
little bit more, save more and,as we mentioned on our Q1
(38:43):
podcast, buy as a family, borrowfrom family and things like
that and people make it work andthen prices will hypothetically
level out over time.
Speaker 1 (38:53):
Yeah, I think you're right, Because for the group who
was looking for a house andthen they went through the whole
experience of seeing the higherinterest rates and the higher
price points and to them it'slike it stings.
It really hurts, right Cause Icould have gotten a house for it
, but now it's.
But if you're just newlylooking for a house, you're just
kind of entering at the pointwhere prices are now but that
(39:15):
that takes a few years toprobably turn, turn the corner
on that, like you're saying.
You know.
Speaker 2 (39:19):
Yeah, so we will see if I am correct and you are
correct and see what these nextthree months bring us until our
next quarterly podcast on the Q3market outlook.
But otherwise thank you forbeing on BEYOND and everybody,
thank you for listening in toour Q2 market outlook and look
forward to having everybodylisten to our next episode of
Inspector Toolbelt Talk.
Speaker 1 (39:38):
Awesome.
Thanks, Ian, Pleasure as alwaysLater.
On behalf of myself, Ian andthe entire ITB team, thank you
for listening to this episode.
Don't forget to hit thatsubscribe button so you can
catch our future episodes aswell, and if you have any
feedback, please send us anemail at info at
inspectortoolbeltcom.
Also, don't forget to check outour app for home inspectors
(40:01):
scheduling and report writingall in one easy to use app.
Check it out now atinspectortoolbeltcom.
Speaker 2 (40:15):
The views and opinions of this podcast and its
guests do not necessarilyreflect the opinions of
Inspector Toolbelt and itsassociates.
This is Inspector Toolbelt Talk.
Speaker 2 (00:10):
Hey, bian, welcome back to the podcast.
Hey, thank you, Bian.
You know I feel bad because youknow, for those that can't see,
obviously most of our listenersare audio, only they can't see
your beautiful InspectorToolbelt shirt.
Speaker 1 (00:22):
Yes man, I'm official .
Speaker 2 (00:24):
And I show up without one.
Speaker 1 (00:26):
Yeah, like a doof On the plus side.
At least you do have a shirt on, so that is good yeah.
Speaker 2 (00:31):
You know we try to keep all our clothes on during
the show.
Great to have you back on.
It's our Q1 Market Outlookpodcast.
So that's something that youand I usually do together here,
and you know I like the Q2market outlook.
It's the, you know, just beforespring hits in most markets.
You know our southern markets.
(00:51):
It's a transition to adifferent kind of market or
northern parts.
You know of the US and Canada.
You know it's a spring marketwhen everything really gets
going.
So it's kind of a fun and wildprediction of what the next
three months are going to bring.
Would you agree with that?
Speaker 1 (01:06):
I would indeed, yes, but before we get started with
that, I haven't been on sincethe convention.
Have we talked about that atall on the podcast?
Speaker 2 (01:13):
No, and I actually have a note here to talk about
that a little bit we did.
We went to the InternationalConvention in Orlando.
That was fun.
Speaker 1 (01:20):
Yeah, that was unreal .
It's the first convention I'vebeen to and, uh, that we've
actually inspector tool belt hashad representation, had a booth
be part of the whole experience.
Um, but you know, the craziestpart, the craziest part to me is
how many people walked up andwanted to take their picture
with you because of inspectortool about talk.
(01:41):
Everyone's like, oh, let mehear it, let me hear it.
And you're like what?
And you're like what, you'relike welcome to Inspector
Toolbot.
And they're like, yeah, that'sit.
Speaker 2 (01:51):
That was so weird.
I mean, we get thousands ofdownloads, just ridiculous
amounts of downloads and listens, and the metrics are all over
and we're very proud of that.
But when you experience it inperson, it's so weird.
Because my wife is like reallypeople wanted a picture with you
.
I'm like, thanks, honey.
But it was super weird, likeand like the, the stuff that
(02:16):
people know about me, because Ijust talk, you know, and people
are like bringing up likepersonal things that I've never
met before.
They're like, hey, wouldn't yourather have a scotch?
And and I'm like actually, yeah, kind of, how do you know that?
Speaker 1 (02:29):
Yeah, no, it was, it was great.
So, yeah, it got took a littlegetting used to because I mean
we've only been obviouslyvirtual and online, you know,
since we started this, and to bein person and to to have a live
fan base, it was a bit surreal,but once we kind of got used to
it, it was just what a coolendorsement from the inspection
community.
I mean.
(02:49):
There was really only a smallpercentage of people who didn't
hear about the podcast orhaven't listened to it at some
other point.
So that was great.
Speaker 2 (02:59):
Yeah, there was over a thousand inspectors.
The vast majority of them wereat our booth, to the point where
I was pretty proud of it.
At one point we congested thearea, like I'm like this is okay
, I can deal with that, but wetalked to so many hundreds of
inspectors and it was just ablast.
And our user base.
They came up and they were alltaking pictures and we got to
(03:21):
meet them in person.
I took pictures of them.
We put them all over theinternet and just like, look at
everybody.
It was just, you know, it's fun, it was like it was just a good
time.
Yeah, you know looking forwardto the next one.
Speaker 1 (03:31):
Absolutely, absolutely.
So, to everyone listening, ifyou stopped by, thank you, and
if you weren't there, make plansto be at the next convention.
It's a cool vibe and we'd loveto meet you all.
But, yeah, committed to our fanbase more than ever.
Let's put it that way.
Speaker 2 (03:47):
And if you wanted an autograph and be on charge for
them.
You know I did not endorse that, it was his own idea.
I'm just kidding.
Yeah, yeah, no, but hey, listen.
So now that we talked about theconvention, which was super cool
, and there's another one comingup later this year which you
should look that up Internashiand Tapria are kind of putting
(04:10):
that one on, but the next threemonths things changed in a way
that I did not completely seeover the last quarter, like we
were pretty on, but there aresome elements in there that I
didn't expect and theregionality of things is gotten
really even deeper.
So I was looking throughCoreLogic, actually, and looking
(04:32):
through some data.
Interestingly enough, southeastFlorida is we're just going to
use Florida as an example for amoment Southeast Florida and
Florida as a whole has become abuyer's market.
What?
Yeah, I know, and it is verymuch regional, and so here let
me grab some data here, but Ididn't expect it to be that
(04:54):
regional.
You know what I mean.
First of all, according to someof the data well, actually all
the data, and CoreLogic was theone that I was kind of going off
of for most of this Last yearwas one of the lowest home sales
in three decades.
A matter of fact, home salesfell to the lowest level at one
point last year in three decades.
(05:16):
So within three decades wasalso the Great Recession.
So less homes at one point lastyear were sold in the entire US
than the Great Recession itself.
That's pretty intense and a lotof guys will call and say Ian,
what do I do?
Business is rough, this andthat, and unfortunately a lot of
it comes down to hold on, andhere's why hold on is important,
(05:39):
because this ultimately leadsto a buyer's market.
So there's been a surge inFlorida home sales, but mostly
because Florida is starting toturn to a buyer's market.
So let's see Florida endedJanuary of this year with
172,209 homes for sale, thehighest level since Redfin,
(06:04):
who's giving this data, beganrecording the data in 2012.
So whenever you have inventory,that's when it becomes a
buyer's market.
Sellers have to start competingfor buyers again.
Now that's Florida as a whole,southeast Florida in particular
(06:25):
had I forget the exactpercentage.
It was a little less than 10%of the homes taken off the
market.
Now you figure that'd be bad,but what happens is they use
that as an indicator of it beinga buyer's market.
So if a house is on a marketfor four or more months and then
it gets taken off of the market, they say, hey, that seller
(06:46):
couldn't get what they wantedfor it, so they took it off to
wait.
And that's an indicator thatit's also a buyer's market,
because otherwise, if you hadfive people competing for that
one house, escalator clauses thewhole nine yards, then it would
be a seller's market.
So Florida right now is a fullblown buyer's market overall.
(07:07):
But it's mostly being carriedby Southeast Florida.
So Northern Florida, westernside not as much, but overall,
if you took it as a whole, fullblown I say full blown it's on
the upward curve of what abuyer's market would be.
So it's got a couple more yearsbefore it peaks out.
That's beautiful, wow.
So it's got a couple more yearsbefore it peaks out, that's
beautiful.
Speaker 1 (07:26):
Wow.
So that's quite something.
And you made me like startthinking a little bit, because
just this last week my wife andI were commenting how in our
neighborhood because, if anybodydoesn't know yet, we live in
Florida, just north of DaytonaBeach, so we're in Northeast
Florida but what we commented onwas that there are more houses
for sale even in our immediateneighborhood than what there has
(07:47):
been since we have moved here.
There's quite a number of houseswith the signs up but they're
not moving.
I mean, those signs have beenup for a while and that makes me
think okay, so, like you say,maybe we're entering into a
buyer's market from the sense ofthere being more inventory, but
it seems like the prices Idon't know, this is just, I have
(08:09):
no data to back this up, but atleast I look at the prices
they're asking for those homesin this immediate neighborhood
it seems like the prices arestill a blocker.
It's like the value hasescalated over the last few
years and I don't know, justthey're not moving.
Some of them have been on themarket for a few months with no
movement.
But I was just trying to putthat in correlation with what
(08:29):
you were just saying.
Speaker 2 (08:30):
Yeah, no, and so that's exactly what happens.
So then, when more houses areon the market, eventually when
you have too much of something.
It was Thomas Sowell.
He was a famous economist andhe talked about how, basically,
scarcity is the principle of alleconomy.
The more you have of something,the less valuable it is.
(08:50):
The less you have of something,the more valuable it is.
Everybody says that, everybodyunderstands that Right.
So the more houses that are outthere, they can't sustain those
prices.
So if somebody puts a house onthe market for $400,000, it sits
there for four months and getstaken off, the next person is
going to say, well, they didn'tget it, let me put it on for
$380,000.
Now, if it goes in three and ahalf months and it sells for
(09:14):
$360,000, now the next person isgoing to say, well, I'm going
to put it on for $360,000 andstart there.
That's the way we lower thecost of the housing stock, which
is very important, becauseprice and a combination of price
and interest rates is reallywhat's keeping people from
buying homes.
But it doesn't matter.
(09:34):
You could have housespractically free.
If there aren't houses for sale, it doesn't matter.
We, as home inspectors, want tosee more houses for sale.
We don't care how much theysell for ultimately, until we're
buying a house ourselves, whatwe want is more houses for sale,
and at 172,000 houses inFlorida, that's the most number
(09:56):
of houses that Florida in a longtime has had for us to inspect,
and that's a good thing.
And we have to think of it as acascading effect too.
So if there's eight houses in aneighborhood like yours that
are for sale, some of them gettaken off the market because
they sit too long.
Some go for a lower price, somesit there for six months to a
(10:17):
year because they have to sellthem.
Now, all of a sudden, sixmonths later, you have 14 houses
for sale and then you have 18houses for sale.
Now you have 20 and the stockwill build.
But then the more we go into aseller's market, not only do we
get those inspections butcumulatively we get more home
inspections per inspector in acouple of different ways.
(10:40):
So a buyer in a buyer's marketis going to be more cautious.
Different ways.
So a buyer in a buyer's marketis going to be more cautious.
So a buyer is more likely towalk away from a home that they
don't like the inspection for.
So if I find roof damage andit's a $30,000 roof and they're
like well, there's 20 houses forsale, I'll just go to the next
one that doesn't have a roofingproblem.
Now we get a second inspectionand, ethically speaking,
(11:04):
hopefully home inspectors areout there failing things hoping
to get a second inspection and,ethically speaking, hopefully
home inspectors are out therefailing things hoping to get a
second inspection.
I hate that.
Just say what it is, let thebuyer decide.
But statistically, let's say,one out of five buyers ends up
walking away from the house andhiring us again.
Cool, so then, on top of that,sellers are more likely to get a
(11:24):
pre-listing inspection becausethey're like, listen, I don't
want to be one of my neighborswhere the house sat here for
eight months and didn't sell andthe two failed inspections.
Let's just get a pre-listinginspection and we'll get it
taken care of.
Let's say one out of five forthat.
So now, instead of fiveinspections, we have seven.
We increased what's that?
20% increase.
Speaker 1 (11:48):
No, that's a 40 increase.
So so more inspections than abuyer's market, than way more
market.
Speaker 2 (11:51):
Okay, all right.
Yep, by my anecdotalcalculations from my own
experience I don't have raw dataon that because most states
aren't reporting for homeinspections that is, it's about
a 40 increase, two for everyfive.
No, that that's pretty logical.
Yeah, I would like to see themarket more like that yeah.
Speaker 1 (12:10):
So then interesting, because then technically we
should, as inventory rises, weshould see price points ease
somewhat.
Um, and, and the crazy part is,is that most of the like you,
zillow and Realtorcom andwhoever else is out there,
redfin yeah, they're all for theyear I don't know which part of
(12:31):
the year, but for the yearthey're still predicting they're
pretty bullish on house value,still increasing from the
previous year.
I don't know if that I meanmaybe like different local
markets will obviously like playout at a different rate or in a
different way, but I wonder, Iwonder how they're coming on
that, or if maybe the currentmove was unanticipated.
Speaker 2 (12:54):
Yeah, so, and I actually agree with them.
I personally I do read a lot ofrealtorcom's data and
zillowcom's data data andzillowcom's data.
Um, I find redfin for somereason seems to have some more
of the more accurate data thatI've seen.
Okay, uh, so I tend to lean ontheirs a little bit more at
times.
But, uh, florida, texas andlouisiana right now florida is
(13:20):
mostly into a buyer's market.
Louisiana and Texas are gettingthere.
Texas new constructioninspections are really, really
bolstering what is there for theinfrastructure for the home
inspection industry and kind ofalways has in a lot of ways.
But those three states areheading into a buyer's market.
Problem is here's anotherexample the Northeast and I'm
(13:45):
not just talking like New Yorkand Massachusetts, I'm talking
like Pennsylvania to the tip ofMaine and everything in between
is very much not doing well forhome inspectors, okay, or for
buyers in general.
Still very much deep in aseller's market Inventory's low
and the same CoreLogic datatalks's market.
(14:05):
Inventory's low and the sameCoreLogic data talks about that
Inventory's low.
House pricing is going way upstill multiple offer situations,
the whole nine yards.
It's still not as bad as it wasa few years ago with all the
skipping of the inspections andthings like that.
There's less of that now, butplaces like the entire Northeast
(14:26):
are why they say house pricesare going to continue to rise.
So you think about Florida.
Florida, let's say, an averagehouse is $400,000.
I don't know, I don't livethere, but now they're still
going to hang out at that pricewhile we enter the buyer's
market.
So it may go down 390.
It may go up and down andfluctuate a little bit, but it's
(14:48):
going to hang right around$400,000.
So there's not going to be adownward sweep in pricing.
That's going to be measurablenationally, whereas places like
the Northeast it may go upanother 3% this year, gotcha.
So that's what sets off thenumbers nationally.
Speaker 1 (15:03):
Yeah, so it becomes a wash and ultimately a gain at
the end of the year.
You didn't mention interestrates.
You know that's always a hardone to try and like predict or
something.
But I did read an interestingarticle this week that was
referring to data that Targetjust released and that it's sort
of like warning sign theeconomy is slowing down,
spending is down.
(15:24):
It's sort of like warning signthe economy is slowing down,
spending is down.
So that is the first time in awhile that we've heard that from
one of the big retailers.
So I mean, potentially that's agood sign for interest rates
easing as well in the nearfuture here.
Speaker 2 (15:37):
The other thing with interest rates is I've said this
all along we can drop theinterest rates to 2%.
The average homebuyer.
It's not going to help themmuch.
If they have $350,000, they canspend, but all the houses are
$450,000.
Right, so interest rate is afactor.
When interest rate's lower,basically the upper 20% of
(16:01):
people in the US are the onesthat make money.
I mean, there's guys out therethat'll just borrow stupid
amounts of money at 2% and 3%,like there were before, you know
, in the twos rather and they'llgo and they'll make 9% on it
and pay back the loan over thecourse of time and then, with
inflation, they're paying back aloan with money that's worth
(16:22):
less, while they're still making9% interest on it.
It's like the average person.
We don't do that.
That's not what the averageperson does.
That's what business savvy andwealthy people do and all that
stuff.
So it's not going to help ourindustry if interest rates just
go down.
Ideally for me, I would like tosee house prices go down first
(16:43):
throughout this year, and thisis going to be an unpopular
opinion because everybody talksabout interest rates.
But you know what?
It's an easy thing to say likeoh, there's a crack in the
foundation.
The foundation must be bad.
It's like well, it's a crack.
Let's talk about all thedifferent other factors.
Interest rates is just one smallaspect.
I'd like to ideally see housessit on the market for a while
(17:07):
and prices go down first.
Then, as prices get closer toaffordable not completely
affordable, let's say, $420,000house is now 390,000.
Then over the course of theyear, and then interest rates
drop.
That's ideally what I wouldlike to see, because now we'll
have inventory and lowerinterest rates.
Because if you just lowerinterest rates right now, you're
(17:29):
going to have another buyingfrenzy of the upper 20% of
people buy all these houses,some will skip inspections and
then we'll just lie flat on ourfaces again.
I'd like to see them pairedtogether, but I'd like to see
interest rates come down lowerlater on.
Do you think interest rates aregoing to come down though?
Yeah, they're right around 7%or so.
Speaker 1 (17:48):
I mean you make a good point because you know
interest rates have obviouslybeen heading up.
They came down a little, thenup again.
So I think there's apsychological factor to like
knowing which direction themarket is moving in and we're
like, oh wow, it looks likewe're going to get some relief.
But what does that relief looklike and what does it translate
to the average buyer's actualmoney that they're going to be
(18:10):
spending each month?
You know.
So, okay, we're sitting above7%.
If we come down below, you know,even to 6%, what does that
actually mean to someone who'sgot a loan for, you know, 300
and some thousand dollars?
You know, I mean I haven't donethe math on it, but to your
point, you need the actualticket price to drop to for it
(18:33):
to actually move the needle.
Dropping down like a few pointsin the percentage point is not
going to probably push them.
So a combination of those twofactors I think I like the way
you mapped it out is the mostlikely path to accelerating the
number of transactions we'regoing to see in the market.
Speaker 2 (18:50):
Yeah, and then there's other factors, like at
the beginning of the year wetalked about how new
construction was, for the firsttime, starting to almost keep up
with demand.
So we were counting on newconstruction to carry out the
year, to help build up the backend of inventory while it
(19:12):
transitioned, in some markets atleast, to a buyer's market, I
mean.
But now, with tariffs and otherthings going on, there's some
uncertainty as to whether or notbuilders can still build houses
relatively affordably andwhether or not some of these big
builders might have troubleslater on for houses that they
(19:33):
spec'd out at a certain pricewithout any kind of escalator in
their contracts with theirbuyers as to what materials are
going to cost.
They could have some issues.
So there's still some questionmarks as to that.
But right now home building hasslowed slightly because of that
and you can't blame it.
You can't blame big builders.
(19:53):
If you're a big builder workingin three States and you're
building hundreds of homes andyou're like man, an extra dollar
per two by four that could.
That could cause us to makelayoffs because we're doing 300
houses.
You know there's a big, there'sa big deal there.
So we'll see where that onelands, but right now that's
slowed down a little bit andthat's going to hurt more places
(20:16):
like Texas and stuff, becausethere's a lot of states in the
Northeast and Northwest.
It's more of a tradition inmost contracts, but most of them
don't get phase inspections.
They just kind of move in andcount on the town inspector to
do a good job, which they neverdo, you know, yeah, so we'll see
where some of those things land.
I think building is still goingto continue to happen, just at
(20:38):
a slower rate, because of theperception of things.
Speaker 1 (20:41):
Yeah, yeah, it will be interesting to see what
actual you know how prices areaffected, for example, on lumber
imports and stuff, Because someof the larger contractors
obviously have massivewarehouses filled with product
and materials that they'vepurchased and negotiated rates
or whatever.
(21:02):
But if you know that the nextbatch is going to cost X amount
higher, you're not going to beselling even your current
inventory at the premium ratethat you were able to buy it for
.
You're going to try and hedgefor that.
So that's why prices usuallyhave almost an immediate effect
on the end consumer, whetheryou're a home buyer getting
(21:22):
those materials through yourbuilder, or if you're going to
Home Depot or Lowe's or anyother lumber yard to get lumber.
So it will be interesting Ihaven't really paid much
attention to those prices inrecent weeks to see how they are
responding, but I'm thinking inthe next few months we'll have
a better idea as to whetherthere is going to be any effect,
(21:44):
how long these tariffs aregoing to be in place, whether
there's alternative supply thatcan be tapped in other parts of
the world for similar pricing.
We just don't know.
We'll have to wait and see howit all trickles down.
Speaker 2 (21:57):
Yeah, and we're going to know by the end of the year,
because you talk about thosewarehouses of stock that they've
built up.
So the federal government, theytax your inventory and it was
actually based on lumber.
It's one of the reasons why wehave that tax, so they can't
store that lumber and then carryit over to the next year.
So by the end of this year orwhenever their fiscal year ends,
(22:20):
these construction companiesare going to need to do
something with it.
So they could be waiting.
And then we see a big boomlater on in the year because
they're like we've got to use upthis lumber or we're paying tax
on it, or they may say, listen,the taxes may be less of a hit
than the increase in price andthey may bite the bullet and
(22:41):
carry it over into next year.
That we're going to have towait to see.
But right now building hasslowed slightly, not incredibly,
but slightly.
I would encourage homeinspectors outside of states
like Texas, where there isbuilding going on, to try to
educate your market on phaseinspections.
(23:02):
That is a great market and 11thmonth inspections those have
been doing well.
But there's nothing like athree-phase inspection.
You have the phase one, phasetwo and the final that will keep
you busy and keep you scheduledout.
Uh, find these developments andfinding the people is hard.
(23:23):
The builders don't want youthere, but a lot of builders
still have that in theircontracts.
Sometimes it's mandated,sometimes it's not to be able to
get phase inspections.
But buyers of new homes in myarea I almost never do you hear
of a phase inspection.
Everybody says the same thingit's a new home, how bad can it
(23:43):
be?
Then you go to places like Imentioned, texas again.
It's like everybody gets aphase inspection.
It's like, wait, you didn't geta phase inspection.
Try to push those a little bit.
I think that's going to be animportant part of staying afloat
and not just staying afloat butowning some market share by
creating that market, gettingout there and saying, okay, how
(24:04):
do I get people to get a phaseinspection and then get them to
hire me to do it?
Speaker 1 (24:07):
Yeah, yeah, so I guess question then, as far as
like marketing and gettingyourself out in front of people
for something like phaseinspections, what are your best
channels to use to try to accessthat target audience?
Speaker 2 (24:21):
Yeah, that's the trouble is how do you target
them?
You're going to get them a lotthrough mortgage lenders and in
states where it's an attorneystate, which means a state where
they use attorneys for closings, talking to them because they
make out the best by protectingtheir clients' interest.
Mortgage companies are tryingto protect their own interest.
(24:41):
So if you can get in front ofthose two parties and you pitch
them two different ways,mortgage people are like hey, do
you want to protect yourinterest?
Do your clients get a phaseinspection?
Because you don't want to havea mortgage on a home that three
years from now they go to selland they sell it you know short
sale.
You know for 80 grand underwhat they paid for it.
You know now you guys are stuck, that doesn't look good.
(25:03):
You're like oh yeah, okay,let's talk about that.
For attorneys it's like hey,you want to protect your clients
from litigation and all thisother stuff?
Consider phase inspections.
Speaker 1 (25:14):
It's a hard sell in certain areas, but getting to
the people is the hardest part,yeah, because I'm even thinking
of the timing that you engagewith an attorney and somebody
doing your mortgage.
It's typically, for most, itwould be at the point where,
like phase inspections arealmost like already you're
looking to close, you know, andget financing and all that kind
of thing.
So even then it's not a donedeal.
Speaker 2 (25:36):
But new construction will still have mortgages on it.
Most homes have a mortgage onit, that's true.
So, unless somebody's buildinga house for 800 grand cash which
people do but for the most partthey're going to have a
mortgage on it, and some lendersrequire a phase inspection, but
I've also seen a lot of lendersthat don't enforce it.
(25:57):
They'll just say, like, did youget inspected?
And like, yeah, sure, and thenthey move on.
There is some open educationthat you can try and I've talked
about this on a previouspodcast like home shows.
You go to those home shows andthere's builders everywhere.
So, listen, you can't be abuilder's friend.
(26:17):
You just have to use, be usedto getting spat on,
metaphorically speaking, bythese builders.
You go to a home show and youset up a booth um, get a phase
inspection, protect yourselffrom the builders.
You're gonna get some dirtylooks, but you're also gonna get
some attention.
You know, um, hang up somepictures of things that you
found on new construction.
(26:38):
You know, discreetly, withoutmentioning any of the builders
in the room, their name.
Yeah, you know, don't, don'tmake enemies, but be like hey,
this is from a new constructioninspection.
Um, you know, if you have otherinspectors that you know in
other areas that have somepictures that they would like to
provide, and you can do abackdrop.
And you know, go to canvacom,c-a-n-v-acom, and you can get
(27:02):
some marketing material theremade and just say, is this
something that you want?
Do you want to have a floodedbasement because they crushed
the you know, the drain linegoing out into the yard when
they were backfilling?
You know, yeah, no, well, here,think about getting a phase
inspection.
Work that into your contract,yeah, yeah.
Speaker 1 (27:19):
I mean you definitely would stand out, even from an
attendee point of view.
Speaker 2 (27:24):
It would be so uncomfortable.
Speaker 1 (27:26):
Here's something different.
You can hire your own securityand have like two bouncer
looking guys at your booth Makesure you stay safe.
But yeah, that's an interestingapproach.
I mean, I guess it's justtrying to get yourself in front
of the would-be buyers to say,hey, like you say, education
campaign, obviously online isanother thing you can try, but
that's really hard Unless youknow what you're doing.
(27:48):
You're just going to bethrowing money down the drain,
pretty much.
Speaker 2 (27:51):
So a couple of things you can also try with new
construction agents in areaswhere they don't do phase
inspections.
They get a little bit wonkyabout it.
They don't like you to try toeducate because it slows down
the whole process.
But online people aren'tsearching for it.
That's why I say an educationcampaign.
If somebody needs to takestatins for their, what's that
(28:15):
for for your cholesterol?
Cholesterol Good, so obviouslya high cholesterol.
Now we all know.
So if you take, if you need totake, statins for your high
cholesterol, but you don't knowyou have high cholesterol,
you're not looking up statins,right?
So you need to know that youcould have a potential issue
before you look for the cure,right, so you need to have an
education campaign.
But the new construction agents, you can try that.
(28:38):
Or you can do a social mediacampaign and run some ads.
So you know, like AJ and them,they do a lot of and Preston
well, preston does mostly olderhomes that you know.
Aj is doing newer homes andhe's like hey, here's, here's
something I found on a newconstruction that's going to
draw more people to go.
Oh, I need a phase inspection.
Um, you can run some ads and avideo is always best for the ads
(29:01):
of you finding stuff on a newconstruction inspection and say,
okay, don't, don't get caught.
If you're buying a home, youknow, make sure.
X, y, z.
Speaker 1 (29:10):
Yep, yeah, social media marketing, I mean, and
lately most platforms are tryingto boost, like, local content.
You know they trying to beaware of, of local business and
trying to do that.
So, yeah, that's a great,that's a great idea.
Well, this is turned from alike a market outlook to a
marketing episode, but it makesit practical, doesn't it?
It's like okay, so this iswhat's happening, so how can you
(29:32):
fix it?
How can you get in front of itto get away from the whole.
Speaker 2 (29:35):
how to market new construction.
Internachi released data, andthe data pointed to the fact
that one in six inspectors arepart of a multi-inspector firm.
Now, wow, one in six.
I take that as five out of sixare independently owned.
(29:57):
Right, so that means themajority of our industry is
still solopreneurs, you know,working on our own which I like.
Speaker 1 (30:04):
Yeah Well, I mean even at the uh, at the
convention and maybe the natureof a convention attendee.
Um, if you're part of amulti-inspector firm, you're
less inclined to maybe want tonetwork and, you know, be be out
there.
Maybe a select few inspectorsfrom the multi-inspector go, but
most of the people we spoke towere, interestingly, were,
(30:25):
husband and wife teams.
There were so many of them Iwouldn't say most, but many of
them they were family businesses.
You know, where the family wasinvolved.
Sometimes even the kids were.
You know, I think even ofPreston how his family is like
engaged with the business andlearning and things like that.
So, yeah, I do want to lookmore at the five out of six than
the one out of six there,because the solo operators are
(30:51):
definitely still the majorityand the life and blood of the
industry.
Speaker 2 (30:54):
Yeah, but the multi-inspector firms are moving
in.
They are, you know, actually, alot of our guests most of our
guests are multi-inspector firms.
Our most popular podcastepisode, though, was about how
to be a successful soloinspector.
Popular podcast episode, though, was about how to be a
successful solo inspector.
So there's a good mix in ourindustry, but I just thought it
was interesting because that'sthe highest number that I think
we've probably ever been at.
Interesting.
I think it's also good becauseI think that's where the market
(31:18):
is shifting to over the nextdecade, and we're going to see
that number grow of those partof multi-inspector firms
consolidating markets.
That's what markets do.
They consolidate over time, butI do think that it's an
opportunity for us to marketourselves if we're a solopreneur
and say, hey, we're stillindependently owned and
multi-inspector firms.
They just have a lot of otheradvantages, like they can spread
(31:38):
themselves out farther, alarger territory, cover short
notice things for buyers andsellers and agents and all that
Right, but I just thought thatwas an interesting side point.
Speaker 1 (31:48):
It is interesting and there is a difference between
being a multi-inspector andbeing like a part of a larger
national franchise.
That's a whole other you knowstory.
So I mean you do get a guy whowas a solo entrepreneur, a solo
inspector, and he's growing andwanting to grow locally.
So you know he hires on acouple of inspectors and he's
growing and wanting to growlocally.
(32:09):
So you know he hires on acouple of inspectors and he
grows organically in that way.
So now he's multi-inspector,which is, I mean, great scale
path for any business.
Right, that's ultimately whateverybody's goal is.
Speaker 2 (32:19):
But yeah, Not necessarily everybody, that's
true.
Some people like to stay solo.
I got to say the happiest I wasinspecting was solo.
You know, just driving aroundfelt like Han Solo, just in my
little spaceship, doing coolthings, touring the galaxy,
doing your thing Touring thegalaxy.
But there are disadvantages,you know, like if you get sick,
(32:40):
you know your truck blows a tireon the highway or you know what
do you do?
You're kind of stuck.
So there's advantages anddisadvantages, but that's just a
market trend.
But here's my prediction, bian,and I don't know about yours.
I think the second quarter, q2,march, april and May I think
it's going to be a good spring.
I think we're going to hitright in the middle, nationally,
(33:03):
us and Canada I think we'regoing to hit right in the middle
.
I don't think it's going to bea nine out of 10 year, I think
it's going to be a five out of10, maybe a six out of 10.
I think new construction overthis next quarter is going to be
very important For markets thatdon't have a lot of new
construction inspections.
I do think that we should startpushing into that market a
(33:24):
little bit harder there andcreate some education and try to
get ourselves in there.
It's not going to be easy toget our foot in the door, but I
do think it's worth it.
I don't think interest ratesare going to go anywhere and I
don't think three months is longenough to see any drastic price
drop.
But for guys in Florida,louisiana and Texas,
congratulations.
You are the first ones to startpulling out of this nosedive
(33:48):
that we've seen for the pastcouple of years in our industry.
Home inspections are going tobe a little bit better, the only
problem that you guys will see.
Besides Louisiana, florida andTexas are two out of the three
top most saturated markets forhome inspectors.
So you're going to still seethat.
But fortunately for you, ifyou're still around, those that
(34:11):
have left have left some marketshare for you.
So I think they're going toride it out for a long time.
But us up in the Northernterritory and out West, we're
still working our way out of themud a little bit.
But these are good signs.
I mean over this year and intonext and 2026 and 2027, we're
only going to see upward trendsfor the most part, unless
(34:32):
something big and crazy happens.
Speaker 1 (34:33):
Yeah, now that sounds like a pretty good prediction
to me, and what you said towardsthe end there, I think, is key.
Like, regionally, there will bea difference in how this plays
out.
There will be a difference inhow this plays out.
So if you maybe followed thisepisode of the podcast to see
how especially Ian does hisanalysis to make these
determinations, use some ofthose inputs in your local
(34:55):
market.
Look at how many houses arethere for sale, what the price
trend is going Are we going up,are we going down?
What is your new constructionstats looking like?
And that'll help you regionallyto see how you can adjust
either up or down expectationsfor your local area.
Speaker 2 (35:12):
Yeah, and that's a great thing to do.
That Bian just mentioned thereis learn to do these things in
your own local market.
Number one look at price drops.
It is a house, bomk, which isback on market, and if it is,
did it come with a price drop?
How many houses were taken offthe market?
And you can set filters forthis on things like Zillow and
other areas and I'll just letyou know hey, this is off the
(35:34):
market or this is back on themarket.
Here's a price drop on thishouse.
I do it for my own local area.
Every time a house drops inprice, I get alerts all over the
place.
I'm just a freak that way.
I like to watch that, but keepan eye on those things.
Once that starts happening moreanecdotally, you can say okay,
cool, that's a good trend for usas a home inspection industry.
Look at the number of houses onthe market.
(35:56):
If there's 300 houses in a20-mile radius of you right now
and then later this year there's412?
Cool, wow, okay.
Then later this year there's412.
Cool, wow, okay.
That that?
That means that hypotheticallysoon, the prices of those houses
are going to start dropping andthat also means that in six
months, you'd probably have sixmonths.
After that, you'd probably havefour or 500 houses in the market
(36:18):
and now it's going to become abuyer's market and you're going
to start to see that 40%increase that I that I told you
about at the beginning of thepodcast.
Speaker 1 (36:26):
Yeah, so do you see a place here in the future where
we're going to see most marketstrend towards a buyer's market
over the next few years?
I mean I guess it's too far outto map, but I mean that's
ideally where we'd like to seethe trend continue, right?
Speaker 2 (36:42):
Cyclically speaking, yes, that is typically what
happens.
You almost never will see atrend where it goes seller's
market and then almost buyer'smarket and then back to seller's
market, unless something crazyhappens.
It's always sellers, buyers,sellers, buyers, up and down
very long run of a very highseller's market.
(37:05):
Usually you peak out in a yearand then you start to drop and
they I don't know the exactcycle number, so maybe I
shouldn't say that it peaks outfaster than than this felt like,
but the pandemic that justtotally changed the whole cycle
of things.
We tend to stay in a buyer'smarket.
Speaker 1 (37:26):
From my experience longer than we do in a seller's
market, and then we forget.
We forget the pain and thesuffering yep.
Speaker 2 (37:32):
So I think we'll be us and canada all together.
I'm hoping mid to 2026, all ofus for the most part.
At the very latest I wouldimagine 2027 middle of the year,
and I always say middle of theyear because you have to get
through the spring boom and thenyou kind of realize what's
going on.
Speaker 1 (37:52):
Okay, yeah well, that makes me kind of excited
because, uh, I know a lot ofguys have that.
Look, there's a lot of guysthat are doing really well, um,
but nobody's gonna.
You know, uh, he's under anyillusion of how the last few
years were.
There were tough years.
So, uh, to hear there's finallysome evidence, some actual hard
evidence of of things moving inthe other direction, um, even
(38:14):
for me not as a home expector itmakes me excited to to see
where the market's going to goand how, how it's going to
benefit everybody.
I'm looking forward to that.
Speaker 2 (38:21):
Yeah, and you know there's also the sentimentality
of people about things Peopleare starting to.
I was just reading an article Iwant to say nerd wallet, but I
don't think it was nerd walletabout how people are starting to
get used to the new price of ahome, get used to new interest
rates.
That takes time.
Once people get used to that,then they'll start to buy a
little bit more, save more and,as we mentioned on our Q1
(38:43):
podcast, buy as a family, borrowfrom family and things like
that and people make it work andthen prices will hypothetically
level out over time.
Speaker 1 (38:53):
Yeah, I think you're right, Because for the group who
was looking for a house andthen they went through the whole
experience of seeing the higherinterest rates and the higher
price points and to them it'slike it stings.
It really hurts, right Cause Icould have gotten a house for it
, but now it's.
But if you're just newlylooking for a house, you're just
kind of entering at the pointwhere prices are now but that
(39:15):
that takes a few years toprobably turn, turn the corner
on that, like you're saying.
You know.
Speaker 2 (39:19):
Yeah, so we will see if I am correct and you are
correct and see what these nextthree months bring us until our
next quarterly podcast on the Q3market outlook.
But otherwise thank you forbeing on BEYOND and everybody,
thank you for listening in toour Q2 market outlook and look
forward to having everybodylisten to our next episode of
Inspector Toolbelt Talk.
Speaker 1 (39:38):
Awesome.
Thanks, Ian, Pleasure as alwaysLater.
On behalf of myself, Ian andthe entire ITB team, thank you
for listening to this episode.
Don't forget to hit thatsubscribe button so you can
catch our future episodes aswell, and if you have any
feedback, please send us anemail at info at
inspectortoolbeltcom.
Also, don't forget to check outour app for home inspectors
(40:01):
scheduling and report writingall in one easy to use app.
Check it out now atinspectortoolbeltcom.
Speaker 2 (40:15):
The views and opinions of this podcast and its
guests do not necessarilyreflect the opinions of
Inspector Toolbelt and itsassociates.
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